Sistema's India operations losses widen Rs 663 crore
Sistema, a mobile phone company posted a loss of Rs 666 crore from its Indian arm for the quarter ended on March 31. This recorded a 63% loss. Company also recognized the fall to rising cost of operations and additional capital expenditure to expand services to new regions in the country.
The company has suffered a loss due to rise in operational costs in all circles. At the end of 2010, some more circles are added like the circles of UP East, West and Gujarat whose impacts become visible in Q1 2011. India's Shyam group has a minority 26% stake in the teleco.
Introducing new networks in new areas had increased the company’s expansion costs along with interest payouts for thousands of crores in loans. In addition, lower usage by new additions outside metros and big cities will continue to put pressure on its profits and margins.
There is a debt of Rs 5,584 crore on the company. Last year in Q1 Telco’s sales were Rs 78.6 crore but this year its sales have increased to Rs 236.2 crore but still its losses widened.